FDA Targets Menthol Cigarettes; Tobacco Stocks Fall

By Johanna Bennett

Cigarette makers are getting burned.

The U.S. Food and Drug Administration on Tuesday that menthol-flavored cigarettes likely pose a greater health risk than regular cigarettes and signaled it was considering regulatory action that could restrict sales.

Such a move could take years, according to the WSJ. But it sent shares of big tobacco companies falling sharply in afternoon market action.

Lorillard (LO) fell 4.2% to $44.19 a share, followed by Reynolds American (RAI), which dropped 2.3% to $50.62.

Add a Comment

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comment

There are 2 comments

JULY 23, 2013 5:56 P.M.

Andrés wrote:

At the externality generated to the state health care costs by the use of these products should be higher the tax (Pigovian tax) to correct the loss of money in maintaining the health of these people who consume cigarettes. the debate should not be whether menthol cigarettes are harmful to health, it is logical that all smoking is bad. the debate is how all of society pays the costs of a bad prevention. These items should have a higher selling price due to state tax application ( http://www.fajate.com.co ).

JULY 24, 2013 10:01 A.M.

smoky wrote:

If people choose to smoke cigarettes or pollute the air by wasting 80% of gasoline driving a car who but the environmental agencies give a hoot; do you think air pollutants from cigarettes is worse than carbon monoxide from automobiles??? The oil cartels just love the air the way it is and so does the fat boy in Washington. .

About Stocks To Watch

Earnings reports, corporate strategies and analyst insights are all part of what moves stocks, and they’re all covered by the Stocks to Watch blog. We also look at macro issues, investor sentiments and hidden trends that are affecting the market. Stocks to Watch gives you the full picture of the U.S. stock markets, all day long.

The blog is written by Ben Levisohn, a former stock trader who has covered financial markets for the Wall Street Journal, Bloomberg and BusinessWeek.